United States District Court, W.D. Virginia, Roanoke Division
BRIAN WISHNEFF & ASSOCIATES LLC, a Virginia limited liability company, Plaintiff,
DELSHAH DEVELOPMENT, INC., a New York corporation, Defendant.
Glen E. Conrad, Senior United States District Judge.
Wishneff & Associates LLC ("Wishneff), a Virginia
limited liability company, filed this action for breach of
contract and quantum meruit against Delshah Development, Inc.
("Delshah"), a New York corporation. Delshah has
moved to dismiss the complaint on several grounds, including
lack of personal jurisdiction. For the following reasons, the
motion will be denied.
provides tax credit consulting services to real estate
developers across the United States. The limited liability
company maintains offices in Roanoke and Arlington, Virginia,
and each of its members is a Virginia resident. Delshah is a
real estate development corporation based in New York City.
Michael Shah is its president.
2015, Delshah and its affiliates were involved in several
real estate development projects in New York City for which
Delshah was interested in obtaining historic tax credits.
Delshah learned about Wishneff from another entity, Higgins
Quasebarth & Partners LLC ("Higgins
Quasebarth"). Delshah initiated contact with Wishneff,
either directly or through Higgins Quasebarth. In August of
2015, Erik Wishneff ("Erik"), the plaintiffs vice
president and general counsel, met with Shah at Delshah's
New York office, where they discussed Wishneff s potential
role as a tax credit consultant. At the end of the meeting,
Shah asked Erik to send him a term sheet. Over the next
several weeks, the parties negotiated a consulting agreement
via telephone and email.
September 30, 2015, Wishneff formally entered into the
Delshah Development Tax Credit Agreement (the
"Agreement") with Delshah Development or its
assignee,  pursuant to which Wishneff agreed to
assist the developer in obtaining historic tax credits to
redevelop certain New York properties. The Agreement, which
was prepared by Wishneff, describes the scope of consulting
work to be performed and the agreed-upon fee arrangement. At
Delshah's request, Wishneff agreed to include a New York
choice-of-law clause. See Agreement 8, Dkt. No 11-2
("The provisions of this Agreement shall be subject to
and construed and enforced in accordance with the laws of the
State of New York."). Wishneff also added the following
waiver provision in a separate paragraph:
6. Waiver of Jury Trial. The parties to this
agreement hereby waive trial by jury and waive any objection
which they may have based on lack of jurisdiction or improper
venue or forum non conveniens to the conduct of any
action instituted hereunder, or arising out of or in
connection with this agreement....
Id. (capitalization omitted). The Agreement
identifies Wishneff as a "Virginia limited liability
company located in Roanoke, Virginia," and requires that
any notices be sent to its Roanoke office address.
Id. at 2, 9.
the Agreement does not designate a place of performance, the
record indicates that most of Wishneff s consulting services
were performed from its offices in Virginia. According to a
sworn affidavit from Erik, "the Defendant and its agents
placed several hundred calls to Plaintiffs phone numbers in
Virginia," during which Wishneff "educated
Defendant on the details of the tax credit programs,
including how to structure transactions ... to maximize tax
credit qualifications." Erik Aff. ¶ 10, Dkt. No.
15. Delshah also "called Plaintiff in Virginia for
advice on marketing efforts for potential tax credit
investors, including legal and financial structuring, due
diligence, and closing calls with prospective investors . . .
." Id. In addition to communicating by
telephone, "the Defendant and its agents sent thousands
of e-mails to Plaintiffs servers in Virginia concerning all
aspects of the project." Id. ¶ 12; see
also Shah Decl. ¶ 16, Dkt. No. 11-1 (acknowledging
that Shah and other Delshah employees engaged in a
"substantial number of communications ... with Erik
letter from counsel dated January 22, 2019, Delshah notified
Wishneff of its intention to terminate the Agreement (the
"Termination Letter"). In the Termination Letter,
which was sent by Federal Express to Wishneff s addresses in
Roanoke and Arlington, Delshah asserted that "Wishneff
failed to perform the duties as required by the agreement and
breached its contract." Termination Ltr. 2, Dkt. No.
11-4. Based on Wishhneffs alleged "failure of
consideration," Delshah further asserted that Wishneff
was not entitled to be paid the fees contemplated under the
Agreement, and that Delshah had no "desire for Wishneff
to continue as a consultant to the project for future
later, on January 23, 2019, Delshah filed a summons with
notice in New York state court against
Wishneff. The summons with notice described the
"Nature of the Action" as follows:
The nature of this action is a claim for money damages as
well as declaratory relief relating to a "Tax Credit
Agreement" dated September 30, 2015
("Agreement"), all pertaining to real estate
transactions in New York County, that the defendant breached
the Agreement including the failure of consideration, that
the Agreement has been terminated, and that plaintiff
incurred damage in the amount of no less than $500, 000.00,
together with interest, contractual attorneys' fees,
costs and disbursements of this action.
Summons with Notice 1, Dkt. No. 11-5.
four weeks later, on February 22, 2019, Wishneff filed the
instant action in this court against Delshah. Wishneff claims
that it substantially performed all of the services required
under the Agreement and that Delshah breached the Agreement
by failing to pay Wishneff for the services provided.
Alternatively, Wishneff maintains that it is entitled to
recover under a theory of quantum meruit.
April 25, 2019, Delshah moved to dismiss the complaint on
several grounds, including lack of personal jurisdiction. In
support of the motion, Delshah submitted Shah's
declaration and several exhibits. Thereafter, the court
scheduled a hearing on the motion and adopted the adjusted
briefing schedule agreed to by the parties. On May 22, 2019,
Wishneff filed a brief in opposition to the motion to
dismiss, along with a sworn affidavit from Erik. The court
held a hearing on the motion on July 15, 2019.
the hearing, the defendant submitted the complaint filed in
New York state court as a supplemental exhibit. The exhibit
indicates that the complaint was filed on July 16, 2019,
nearly seven months after Delshah filed its summons with
pending motion, Delshah primarily argues that the complaint
is subject to dismissal for lack of personal jurisdiction. In
the alternative, Delshah contends that the complaint should
be dismissed under the prior-pending-action doctrine or the
Colorado River abstention doctrine. The court will
address each argument in turn.
12(b)(2) of the Federal Rules of Civil Procedure authorizes
dismissal for lack of personal jurisdiction. Under this rule,
"a defendant must affirmatively raise a personal
jurisdiction challenge, but the plaintiff bears the burden of
demonstrating personal jurisdiction at every stage following
such challenge." Grayson v. Anderson, 816 F.3d
262, 267 (4th Cir. 2016). "The plaintiffs burden in
establishing jurisdiction varies according to the posture of
a case and the evidence that has been presented to the
court." Id. at 268. For instance, "when
the parties have not yet had a fair opportunity to develop
and present the relevant jurisdictional evidence,"
plaintiffs need only make a prima facie showing of
personal jurisdiction. Sneha Media & Entm't LLC
v. Associated Broad. Co. P Ltd., 911 F.3d 192, 196-97
(4th Cir. 2018). However, "when, as here, the court does
not preclude the parties from pursuing jurisdictional
discovery, and holds a hearing at which ...